Question: Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return 50 Agressive Stock Defensive

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return 50 Agressive Stock Defensive Stock 3.50 32 14 2. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Bata A Beta D 2.00 0.70 b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 20%? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D c. If the T-bill rate is 8%, and the market return is equally likely to be 5% or 20%, what are the alphas of the two stocks? (Leave no cells blank - be certain to enter "O" wherever required. Negative values should be indicated by a minus sign. Round your answers to 1 decimal place.) Che Beta A Beta D 2.00 0.70 b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 20%? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D % % c. If the T-bill rate is 8%, and the market return is equally likely to be 5% or 20%, what are the alphas of the two stocks? (Leave no cells blank - be certain to enter "o" wherever required. Negative values should be indicated by a minus sign. Round your answers to 1 decimal place.) % Alpha A Alpha D %
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